The Economic Survey 2025-26 has called for aggressive fiscal measures to tackle the nation’s growing health crisis, including moving ultra-processed foods into the highest GST tax slabs and imposing additional surcharges on products high in sugar, salt, and fat.
These suggestions come in the backdrop of an increasing burden of childhood obesity, with the prevalence in children under five rising from 2.1% in 2015-16 to 3.4% in recent years.
The survey presented on Thursday also recommended a potential marketing ban on ultra-processed foods between 6 am and 11 pm across all media platforms. It advocated for mandatory “front-of-pack” warning labels rather than complex star ratings, as studies show direct warnings are more effective at discouraging consumers.
The survey warned that the number of children classified in India as obese is expected to reach 8.3 crore by 2035 from 3.3 crore in 2020.
India has emerged as one of the world’s fastest-growing markets for ultra-processed foods sales, which expanded by more than 150% between 2009 and 2023. Retail sales of these products skyrocketed from $0.9 billion in 2006 to nearly $38 billion in 2019—a 40-fold increase.
Ultra-processed foods include soft drinks, packaged potato wafers, chocolate, candy, ice cream, sweetened breakfast cereals, packaged soups, nuggets, fries, etc., which are low on nutrients and typically contain extremely high levels of salt, sugar, and unhealthy fats, and are also often referred to as “predigested” food.
According to a WHO (World Health Organization) report published in 2023, India’s consumption of ultra-processed foods shot up from about $900 million in 2006 to more than $37.9 billion in 2019.
The survey noted that during this same period, obesity rates nearly doubled among both men and women, directly linked to the surge in consumption of these foods.
“The option of a marketing ban on UPFs from 0600 hours to 2300 hours for all media, and enforcing restrictions on the marketing of infant and toddler milk and beverages, could be explored,” it said.
Last year, the Economic Survey also warned about India’s rising obesity rates and suggested a “health tax” on junk food to keep the population healthy and productive.
The latest survey cited Chile as an example of a country with integrated laws, alongside Norway and the UK, which recently banned junk food advertising before 9 pm.
It suggested that further action, such as restricting school and college sponsorships by UPF manufacturers, should be designed. The Survey also noted that revenue generated from these higher taxes should be earmarked for public health initiatives, including improving school meals and funding prevention campaigns for non-communicable diseases.
The Economic Survey revealed a grim reality on the increasing burden of cardiovascular diseases that have become the leading cause of death for both men and women. While men face higher mortality rates, women often suffer worse outcomes due to delayed diagnosis.
The survey emphasized that obesity is no longer just an urban issue; it is a major public health challenge affecting both rural and urban populations, driven by sedentary lifestyles and the consumption of high-fat, sugar, and salt (HFSS) foods.
Highlighting aggressive industry tactics, the survey noted that “buy one get one free” deals, celebrity endorsements, and emotional storytelling have successfully displaced whole foods in the Indian diet.
Many products are marketed as healthy options despite being ultra-processed, leaving adolescents particularly vulnerable to advertisements that create a strong desire for unhealthy snacks, it said.
Policy gaps
The report criticized the current regulatory environment and noted that Central Consumer Protection Authority (CCPA) guidelines aim to prevent misleading ads, and enforcement leaves much to be desired.
It identified a “critical policy gap” in which a lack of clear, nutrient-based definitions allows companies to make vague claims about “energy” or “nutrition” without violating any standards.
“This regulatory ambiguity allows companies marketing UPFs to continue making vague ‘health,’ ‘energy,’ or ‘nutrition’ cues without violating any clearly defined standard, highlighting a critical policy gap that needs reform,” the survey stated.
“ The recommendation for higher taxes on ultra-processed foods (UPF) is timely. The rise in childhood obesity is alarming. As is the challenge of obesity related chronic cardio-metabolic diseases,” said (Prof) Dr. K Srinath Reddy, former president, Public Health Foundation of India (PHFI).
“Even when adults do not meet the conventional criteria of obesity, excess body fat and low muscle mass lead to inflammation, low immunity and increased risk of diabetes and heart attacks. Raised taxes will help reduce consumption. Strong warning labels of packaged UPF should also be introduced, apart from raised taxes.”
Dr. Soumya Swaminathan, former chief scientist at the World Health Organization (WHO) said, “Ultra-processed foods—which are high in sugar, salt, and unhealthy fats—are becoming increasingly prevalent due to their convenience and aggressive marketing. These products are often cheaper and more accessible than healthy alternatives.”
The government should apply the same scientific communication strategies successfully used for HIV/AIDS and tobacco to UPFs, helping the public distinguish between healthy and unhealthy options,” Swaminathan added.
“Implementing colour-coded, front-of-pack labelling is a key intervention to help even those with low literacy levels make informed choices. The government must also incentivize companies to produce nutritious, affordable, ready-to-eat healthy alternatives for working women and children,” she said.
“We fully support a GST increase for these products. The resulting revenue should be strictly channeled into disease prevention and health promotion—specifically adding fruits and vegetables to school meal programs to address micronutrient deficiencies and improve overall dietary diversity,” Swaminathan added.
Drop in infant mortality rate
The survey also highlighted a major victory for child health, reporting that infant deaths have dropped by 37% since 2013. Several states have even cut their mortality rates in half, with Kerala reaching single digits.
“The infant mortality rate (IMR) marked a drop of more than 37 percent over the past decade, declining from 40 deaths per thousand live births in 2013 to 25 in 2023. Several states, including Karnataka and Himachal Pradesh, have halved their IMRs over the past decade, marking substantial gains in health outcomes,” the survey said.
“Kerala, Manipur, Sikkim, and Goa now have IMRs in the single digits, comparable to those of developed nations. This reflects significant improvements in neonatal and maternal care, as well as overall healthcare and socioeconomic conditions,” the survey added.
Dr. Swaminathan, who is also the former Director General of the Indian Council of Medical Research (ICMR), appreciated the government’s efforts in reducing infant and maternal mortality.
“We must now analyze disaggregated data to address remaining inequalities. The focus must shift to tribal areas and SC/ST populations, where mortality rates remain disproportionately high. Even in wealthier states, certain districts or ‘aspirational blocks’ face significant challenges such as poverty, illiteracy, and geographic distances that hinder healthcare access,” Swaminathan said.
She suggested strengthening primary healthcare through health and wellness centers to ensure that every pregnant woman and newborn in India receives consistent, quality care.
